Jefferson Health posted a $117 million loss, as temporary staffing costs remain higher than expected
Losses continued at the not-for-profit system as new leadership works to integrate a collection of 18 hospitals acquired from 2015 through 2021 under former chief executive Stephen K. Klasko.
Thomas Jefferson University on Monday reported a $117 million operating loss for the nine months that ended in March — nearly three times bigger than the loss for the comparable period a year ago.
Jefferson is typically the first of the not-for-profit health systems in the Philadelphia region to report quarterly financial results to municipal bondholders. Experts expect results for the March quarter to show that many health systems are still struggling financially because their costs have outpaced revenue growth and federal COVID-19 aid has stopped.
A bright spot for Jefferson, which owns the most hospitals in the Philadelphia region, was Health Partners Plans Inc. The not-for-profit Medicaid and Medicare insurer had a $36 million operating profit, helping offset a $153 million operating loss at Jefferson’s 18 hospitals and other clinical businesses.
The report to municipal bond investors showed that Jefferson had $7 billion in revenue in the first three quarters of the fiscal year that ends June 30. Overall, revenue was up 22% from $5.8 billion the year before. Much of the gain came from the acquisition of Health Partners, which Jefferson completed in late 2021. Also that fall, Jefferson completed its acquisition of Einstein Healthcare Network.
Jefferson said the cost of temporary nurses and other staff needed to fill vacancies factored into its loss. Temporary staffing costs totaled $63 million more than it had budgeted for, Jefferson said.
Other unanticipated costs in the quarter included interest on borrowings from a line of credit, employee severance, and support to St. Christopher’s Hospital for Children, Jefferson said.
Neither Jefferson nor Tower Health, which owns St. Chris, provided details on that support to the North Philadelphia safety-net hospital.
The unbudgeted severance likely came from a restructuring announced in January that divided Jefferson’s 18 hospitals into three regions, each with its own president, a change designed to help integrate Jefferson’s hospitals.
Among those who lost their jobs were Richard J. Webster, president of Thomas Jefferson University Hospital in Center City and Magee Rehabilitation Hospital, and Alison Ferren, president and chief operating officer of Abington Health.